When businesses began to migrate onto social media, many were skeptical. Some were downright cynical. Indeed, for the first few years many brands found little success at generating the types of actions they wanted, often seeing conversion rates as low as a quarter of a percent.
That was then. Since that time, brands have gotten smarter about the way they use social media, and the platforms themselves have slowly evolved to facilitate the types of brand interactions that eCommerce businesses were hoping for.
Now, social media is growing rapidly as both a brand building force and a viable method of directing people into the later steps of your sales funnel. Business Insider reports that the top 500 eCommerce retailers were able to earn $3.3 billion from social media shopping in 2014 alone — a 26% increase compared to the year before. This growing trend is set to dominate the online landscape as digital marketers develop more effective tactics that seek tighter ROI margins than ever before.
The Book of Faces: From Baby Pics to Virtual Baskets
Facebook is by far the most prolific generator of social sales, with over 60 percent of total social-generated revenue earned through the site in Q4 2014. This dominance represented quite a jump from Q3, where it had less than 40 percent of all sales. Even traditionally successful platforms like email marketing have shrunk when examining this particular metric.
Email taking a backseat is especially surprising given that it has always been a darling of the digital marketing world. Its site conversion rates accounted for about 13 percent of all the traffic generated by digital means in Q1 2015. By comparison, social media represented a paltry 1.5 percent. Yet it was still able to take in the lion’s share of revenue because of the different way social peers respond to product discovery.
One thing that social media has that email does not, though, is a way to translate product discovery into immediate purchases. Sites like Facebook, Twitter and Pinterest have been experimenting with and slowly debuting “Buy” buttons for their platform to allow users to directly purchase a product without leaving the social branded channels. This type of potential offers exciting promises for the future, even if now they are still in their infant stages of release.
The Shopify Success Story
One of the first eCommerce merchants to debunk the myth of social media ineffectiveness was Shopify. Looking at data generated in 2013, they discovered that more social media content postings were leading to direct product purchase conversions than conventional “wisdom” hinted at.
Facebook alone generated 23.3 million visits, accounting for 63 percent of social-generated traffic during this time. Zuckerberg’s darling network captured over 85 percent of all social sales conversions for products related to:
- Jewelry and watches
- Pet supplies
- Clothing and apparel
- Food and beverage
- Sports and recreation
Photography conversions were nearly 100 percent. Even more encouraging, the average order value that resulted from a Facebook-generated lead was $55 — no chump change compared to the tiny purchases some make through other product discovery environments.
It is worth noting that while Facebook dominated these categories, other sites were more successful at generating revenue for other products:
- 74 percent antiques and collectibles — Pinterest
- 31 percent electronics and appliances — Reddit
- 29 percent merchandise — YouTube
Getting Customers to Tune into Your Social Channel
Beyond pure lead generation, social media offers powerful brand education opportunities both through branded channels and through peer-connected brand advocates. SproutSocial claims that 74 percent of purchase decisions are being influenced by social networks, and Nielsen discovered that 90 percent of consumers are trustful of product recommendations from their peers, compared to 33 percent who trust advertising claims.
Brands that want to leverage the potent opportunities provided by social media should focus on creating engaging content and also on interacting with their client network to spread brand affinity. They can also offer exclusive promotions and coupons created through social engagement to drive action. Visit Thrive Commerce’s product page to discover more.